The Rise of Coinbase: The World’s First Blockchain Unicorn
In a landscape where digital currency exchanges are a dime a dozen, Coinbase stands out as a beacon of safety, regulatory compliance, and ease of use. This American company has become the most popular encryption asset exchange for the general public, and its recent success has catapulted it into the unicorn club, with a valuation of $217 million. But what sets Coinbase apart from its competitors, and how does it plan to revolutionize the world of digital currencies?
A Brief History of Coinbase
Coinbase was founded in 2011 by Brian Armstrong, a former Airbnb engineer, with the financial support of Y Combinator. In 2012, Fred Ehrsam, a former Goldman Sachs trader, joined the company as co-founder, and Coinbase launched its business of buying, selling, and storing bitcoin. Today, Coinbase operates in 32 countries and has four main businesses: Coinbase, GDAX, Custody, and Toshi.
Coinbase & GDAX: A Tale of Two Exchanges
Coinbase operates not one, but two exchanges: Coinbase and GDAX. While Coinbase is geared towards retail investors, GDAX is designed for professional traders and institutional investors. The two exchanges are connected, with Coinbase allowing retail investors to buy and sell digital currencies at the mid-market price set by GDAX. This unique setup provides a safe and secure way for retail investors to access the world of digital currencies.
The Hosted Wallet: A Secure Solution for Consumers
Coinbase’s hosted wallet service provides a secure way for consumers to store their encrypted digital assets. By hosting wallets for its users, Coinbase eliminates the need for consumers to manage their own private keys, making it easier for them to store and manage their digital assets.
Custody Business: A New Era for Institutional Investors
In November 2017, Coinbase announced its custody business, providing financial control and storage solutions for institutional investors to trade digital assets. This move was aimed at attracting strong financial institutional investors, such as hedge funds and pension funds. The custody business is not the first in the field, but Coinbase’s reputation for safety and security makes it an attractive option for institutional investors.
Toshi: A Decentralized Application Browser
Toshi is a long-term project of Coinbase, aimed at creating a decentralized application browser for Ethereum Square. The application allows users to access a variety of decentralized applications on the Ethereum Square blockchain, making it easier for users to access and interact with decentralized applications.
The Road Ahead: Financial Liberalization
Coinbase’s vision is to create a new “open financial system,” where digital currencies are not just speculation, but a legitimate way to store and manage assets. The company plans to achieve this by making it easier for institutional investors to access digital currencies and by providing a secure and user-friendly platform for consumers to buy and sell digital currencies.
Challenges & Risks: A New Era for Digital Currencies
As Coinbase continues to grow and expand its services, it faces new challenges and risks. The company must navigate the complex world of regulatory compliance, while also ensuring the security and safety of its users’ assets. Additionally, the company must balance its desire to provide a user-friendly platform with the need to attract institutional investors.
Conclusion
Coinbase has become the world’s first blockchain unicorn, with a valuation of $217 million. Its unique setup of two exchanges, Coinbase and GDAX, provides a safe and secure way for retail investors to access the world of digital currencies. The company’s hosted wallet service and custody business provide a secure solution for consumers and institutional investors alike. As Coinbase continues to grow and expand its services, it faces new challenges and risks, but its vision of creating a new “open financial system” remains a compelling one.
Exchange 101: Understanding the Basics of Digital Currencies
Like Bitcoin, Ethereum Square, and Litecoin, digital currencies are obtained in two ways: by mining or transactions. Mining is a complex and costly process, making it difficult for beginners to access digital currencies. Institutional investors have become a major platform for accessing digital assets, with exchanges like Coinbase, Kraken, and Bitstamp providing a safe and secure way to buy and sell digital currencies.
Understanding the Basics of Exchange
When discussing exchange, there are several important terms to understand:
- Transaction: The main way to trade, where the object of the transaction is the digital currency being traded, and the quote currency is the currency being used to buy or sell the digital currency.
- Transaction commission books: Display all buying and selling at a given time, showing the total amount of buying and selling at a certain price (supply and demand), which is the “size of the market.”
- Depth map: A visual way to display the cumulative buying and selling in a certain price range, providing a good way to measure liquidity.
- Middle market price: The optimal price between selling price and the purchase price optimal, may also be referred to as the average of the current bid or offer.
Coinbase Basic Overview
Coinbase was founded in 2011 by Brian Armstrong, with the financial support of Y Combinator. In 2012, Fred Ehrsam, a former Goldman Sachs trader, joined the company as co-founder, and Coinbase launched its business of buying, selling, and storing bitcoin. Today, Coinbase operates in 32 countries and has four main businesses: Coinbase, GDAX, Custody, and Toshi.
Coinbase & GDAX
Coinbase operates two exchanges: Coinbase and GDAX. While Coinbase is geared towards retail investors, GDAX is designed for professional traders and institutional investors. The two exchanges are connected, with Coinbase allowing retail investors to buy and sell digital currencies at the mid-market price set by GDAX.
Hosted Wallet
Coinbase’s hosted wallet service provides a secure way for consumers to store their encrypted digital assets. By hosting wallets for its users, Coinbase eliminates the need for consumers to manage their own private keys, making it easier for them to store and manage their digital assets.
Custody Business
In November 2017, Coinbase announced its custody business, providing financial control and storage solutions for institutional investors to trade digital assets. This move was aimed at attracting strong financial institutional investors, such as hedge funds and pension funds.
Toshi
Toshi is a long-term project of Coinbase, aimed at creating a decentralized application browser for Ethereum Square. The application allows users to access a variety of decentralized applications on the Ethereum Square blockchain, making it easier for users to access and interact with decentralized applications.
The Road Ahead: Financial Liberalization
Coinbase’s vision is to create a new “open financial system,” where digital currencies are not just speculation, but a legitimate way to store and manage assets. The company plans to achieve this by making it easier for institutional investors to access digital currencies and by providing a secure and user-friendly platform for consumers to buy and sell digital currencies.
Challenges & Risks
As Coinbase continues to grow and expand its services, it faces new challenges and risks. The company must navigate the complex world of regulatory compliance, while also ensuring the security and safety of its users’ assets. Additionally, the company must balance its desire to provide a user-friendly platform with the need to attract institutional investors.